Question

A sporting goods store purchased $7,000 of ski boots in October. The store had $3,000 of ski boots in inventory at the beginning of October, and expects to have $2,000 of ski boots in inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?
a. $5,700
b. $8,000
c. $10,000
d. $9,500

Answer 1

Answer:

The answer is $8000 B)

Explanation:

We're given the following information

Opening stock of ski boots for october - $ 3000

Purchases for october - $ 7000

Closing inventory at end of october - $ 2000

We can use the following inventory to determine the cost of good sold / cost of sales

Opening Inventory + Purchases - Closing Inventory = Cost of Sales

We now apply the formula

3000 + 7000 - 2000 = 8000

The answer is therefore B) $8000

If we use this as the cost of sales figure we're left with $ 2000 worth of ski boots at the end of the month too. Therefore this figure is correct

Answer 2

Answer:

The answer is B. $8,000

Explanation:

From the question above, we have the following:

Cost of goods purchased= $7,000

Cost of goods in inventory= $3,000

Expected cost of inventory goods at the end of October = $2,000

To get the budgeted cost of goods sold in October, we calculate thus:

=> $7,000 + $3,000

=> $10,000

Because we expect that there will be a leftover of $2,000 inventory, we say:

=> $10,000 - $2,000

=> $8,000.

Option B.